Master Report: Loyalty Marketing

Long gone are the days where merchants employ stick-and-carrot tactics to drive sales performance. Increasingly these days, the focus has shifted to empowering the sales team so it is able to sell more effectively and turn them into ambassadors of their brand. Read here for case studies on companies who have successfully empowered sales teams.

Have an eye on the “softer” side of value creation; that which is based on the emotional connection between your company and its customers.

Projects that focus on technology first, rather than the customer and business objectives, are destined for a bumpy ride or failure.

Our decades in the business of helping global brands grow their business suggests the most successful, memorable and profitable CRM or loyalty plays always start with a business strategy that drives changes in the organisation and work processes, which are in turn enabled by information technology. For more on CRM and loyalty strategies, click here.

The rise of the chief customer officer

Businesses are now putting the customer right in the centre and orienting the company around them, signalling the importance of customer loyalty for firms. Rayana Pandey writes.

If there is one priority businesses have for 2015, it’s to become more and more customer-centric. To that effect, globally, the industry is seeing the rise of the chief customer officer (CCO), a new role within the C-suite, to understand critical issues related to their customers, their demands and behaviours. As firms shift from merely wanting customer satisfaction to wanting to incite customer loyalty, more firms see the need for such a role.

A TNS survey highlighted how crucial customer loyalty is to businesses. According to the survey, companies can no longer ensure loyalty and spend just by providing a reliable, consistent service. In fact, many of those who defected to a competitor actually felt their current provider was performing well.

“What is absolutely crucial is being highly active on an individual customer level to deliver a consistent and on-brand experience wherever and whenever the customer connects with you – and to be able to rescue any shortcoming immediately,” said Graham Tocher, managing director, customer, employee, and reputation management, at TNS Asia Pacific.

While not as prevalent in Asia at the moment, the rise of the chief customer officer is perhaps the one thing to look out for in 2015.

The CCO Council defines the chief customer officer as “an executive that provides the comprehensive and authoritative view of the customer and creates corporate and customer strategy at the highest levels of the company to maximise customer acquisition, retention and profitability”.

According to Paul Hagan, principal analyst at Forrester Research, in a HBR article, there are several labels firms typically give this role. Chief client officer, chief experience officer, executive vice-president, member experience or chief global customer and marketing officer are some of the alternative titles.

According to a study carried out by the council, the chief customer officer is becoming a staple of modern business: 22% of Fortune 100 companies and 10% of Fortune 500 companies have adopted the role. It is common in small companies and, to a lesser extent, enterprise companies, but inexplicably uncommon in mid-size companies.

I sat down for a chat with Michael McLaren, MRM//McCann’s global CEO, who agreed this trend was on the rise.

“Several clients have moved to this way of doing business. They have what is now a chief customer officer and what this signals is a huge shift of focus towards customer-centricity,” he said.

Businesses are now putting the customer right in the centre and orienting the company around them.

CCOs typically report to the CEOs, and function independently, and as McLaren says, they have an end-to-end remit, and are much like an “ombudsman, rolling across the organisation” measuring and monitoring touch-points and looking at pain points of customers when dealing with the company.

Questions over the future of CMOs and their role in the organisation have always come up in industry forums and discussions from time to time. There are also various surveys indicating why CMOs are not considered for CEOs role. Could CCOs be the next natural step for marketers?

“If the marketer is the voice of the customer within the organisation, then they are best suited to assume the role of a CCO,” McLaren said.

What does this mean for companies?

In a highly siloed organisation structure, a CCO is perhaps a solid step to break these silos down. This sort of reorganisation within companies also has bigger implications for the marketing agency landscape.

While at one point, agencies were busy building specialities within their structure, large global agencies serving global clients have moved towards a centralised set-up to serve these clients.

MRM//McCann has recently snapped up Cisco’s global demand-generation duties and new business from Microsoft as its AOR. For Microsoft, which was an IPG global win hubbed out of McCann WG Singapore for the Asia Pacific region, the agency group has put together a consortium.

The business unit is recognised globally as m:united, and in Asia, is led by Nicholas Handel, IPG lead; Simon Clancy, strategic lead; Peter Hibberd, creative lead; Avaneesh Sharma, finance lead; with Rob Doswell as CEO of McCann Worldgroup Singapore.

McLaren said the burden of integration was higher in bigger, global clients, both in terms of time and money.

“If the agency partners can deliver that for you – it will allow marketers to do what they’re supposed to be doing, which is marketing.”

The study by the CCO Council further stated that currently, the role was most commonly found in technology sectors and was largely concentrated in the US, however, worldwide adoption had increased in recent years.

What impedes the adoption of this across companies though, is partly the lack of standardisation in how it is defined and also challenges of proving definitive ROI.

“In earlier days, the CCO role was a terminal position. Most CCOs retired from their jobs; they were not usually promoted. For the first time, however, CCOs are experiencing upward mobility, receiving promotions to COOs, presidents of business units, and even CEOs,” the study said.